LOOKING AT LEGISLATION: LIBERALISATION IS SPREADING
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• Road Haulage Association national chairman Glyn Samuel visits the Southern African kingdom of Swaziland this month. He is not prospecting for an even further-flung venue for the 1989 RHA National Conference. Nor is he simply escaping the British winter.
He has been invited by the RHA's South African equivalent, the Public Carriers Association (PCA), to address its conference on the effects of liberalisation of the haulage industry.
Swaziland is not one of the "homelands", but a genuinely independent country. So the PCA, like the RHA, is holding its conference abroad, though with quite different motives. The RHA seeks the sun. PCA members get plenty of that at home. They go abroad to benefit from Swaziland's more liberal laws on gambling (and on other pastimes I won't mention).
For South Africa is joining those countries which have decided that strict economic regulation of transport is no longer appropriate. A White Paper recently proposed a switch to quality controls.
In this country that change took place in 1970. South Africa starts the deregulation process from even further back than Britain. For the bulk of the transport industry, both passenger and freight, by all modes road, rail, harbours, pipelines, and airlines is owned by the nationalised South African Transport Services (SATS).
SATS road vehicles pay no licence fees. Privately owned carriers seeking permits will normally find themselves opposed by SATS, especially if they will be in competition with South African Railways. Most of these objections succeed. Even when permits are granted they are often restricted to carriage from the nearest railhead, and to the transport of specific types of goods. In return for this powerful position, SATS indulges in massive cross-subsidisation of pacsenger transport, export promotion and regional development.
The White Paper wants to sweep all this away. "Economic decisions should as far as possible be left to the market to resolve," it says. "Financial inequities between the different modes of transport should be removed". Instead of cross-subsidation "uneconomic services should be subsidised directly", by whichever public body requires the service.
The White Paper does not directly deal with the question of ownership of SATS, but it notes that another study is in hand to see whether parts of it, including its road transport arms, should be "privatized".
The present permit system is said to cost the private sector carriers at least £20 million a year in administrative and legal costs. The real cost, however, is probably in the loss of efficiency inevitably associated with such a rigid system.
As usual in these circumstances, the lifting of economic restraints will be accompanied by a tightening up of quality controls. I described last November how Canada, alerted by the safety controversy generated by the word "de-regulation" in the USA, had christened its liberalisation programme "Economic Regulatory Reform", unhappily abbreviated to "ERR''. South Africa calls its measures "Road Freight Quality System". The main ingredients are: • The various laws of Muth Africa's four Provinces will be rationalised; • Operators will, for the first time, become a recognised entity, instead of drivers bearing the brunt of the law; • The standards of driver licensing and vehicle maintenance will be reviewed for easier enforcement; and • Enforcement will be more effectively managed, with a centrally maintained system of penalty points.
Reaction to the proposals has been mixed. SATS, which clearly stands to lose out when the law is reformed, became even more aggressive in objecting to permit applications. According to the PCA, it stepped up complaints about alleged permit contraventions by its private competitors. This is more important than it might seem at first glance. For the present law imposes a fine of about £3,000 or two years' imprisonment on a second conviction for permit offences; after a third conviction the vehicle can be forfeited.
This tough action by SATS seems to have converted the PCA into strong supporters of the deregulation propocals. As an interim measure it wants the forfeiture provision to be rescinded and for permits, while they last, to allow the carriage of all types of goods except explosives.
SATS is unrepentant. While it has to crosssubsidise without compensation it demands the right to use the present system, but it claims to be looking forward to de-regulation, promising that once it has been relieved of this burden it will then reduce those rates on which it makes 'huge profits".
Similar principles will be applied to the bus industry, but with certain additions. Bus subsidies have been rising in real terms by 16% a year over the past decade. The White Paper adopts the goal of phasing them out in the long term, but clearly they cannot suddenly be dropped. In future subsidisation will be done directly and openly, and decisions will be taken at "the lowest level of Government possible", to be close to the people affected by them.
South Africa's colour problem is touched on Ln the statement that the Black community, which comprises the majority of public transport users, perceives bus companies as "White"-owned monopolies not wanting to allow competition from "Black" -owned taxis.
Except for the racial issue this all seems very familiar. That is not surprising, since South African officials have done the rounds in Marsham Street and Brussels before writing their White Paper. White Papers, however, are one thing; what happens on the road is often quite another. So the PCA was wise to find out from the RHA national chairman what it has meant in practice over here.
by Keith Vincent